Financial Incentives for Owners of Historic Properties

There are several federal, state and local financial incentives available to assist property owners doing rehabilitation work on historic properties. These programs are available to property-owners who own properties that are listed on the National or State Registers of Historic Places and/or one of the City’s local historic districts.

Rhode Island Historic Preservation and Heritage Commission
The following programs are administered by the Rhode Island Historical Preservation & Heritage Commission. For more information, call RIHPHC at 401.277.2678 or visit them online at http://www.preservation.ri.gov/.

Federal Tax Credit for Income-Producing Properties
A federal 20% income tax credit is available for the certified substantial rehabilitation of historic commercial, industrial, and rental residential buildings (i.e.: depreciable property, used in trade or business or held for the production of income,), not an owner-occupied residence, and listed on the National Register of Historic Places as individual structures or as part of a historic district and certified as being of historic significance to the district.

The incentive is a tax credit taken on the owner’s federal income tax equal to 20% of Qualified Rehabilitation Expenditures. The rehabilitation cost must exceed the adjusted basis of the building and the rehabilitation must be completed within a 24-month period.
Projects must meet the Secretary of the Interior's Standards for Rehabilitation. Final certificates are issued by the National Park Service.

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Historic Homeowner Tax Credit
A state 20% income tax credit for restoration work on owner-occupied historic houses listed on the National or State Registers of Historic Places. Single-family, two-family, and three-family residences are eligible. If the property has more than three units, restrictions apply. Rental apartments, stores and offices are generally ineligible.

The credit equals 20% of the cost of exterior restoration work (i.e.: for every $2000 you spend, you get $400 back). The maximum credit per year is $2000, and unused credits can be rolled over to future years, so long as the owner continues to live in the house and maintain its historic features.

Most exterior repairs will qualify as long as the work meets the Secretary of the Interior's Standards.

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